Royal Dutch/Shell
Australia's Gorgon gas fields to the U.S. west coast
By Andrea R. Mihailescu Energy Correspondent
Washington, DC, Apr. 15 (UPI) -- Royal Dutch/Shell plans to secure up
to 2.5 million tons of liquefied natural gas (LNG) annually from
Australia's Gorgon gas fields to the U.S. west coast in a deal worth
more than $10 billion, according to Ian McKenzie, Shell's Perth-based
general manager for government and public affairs.
Under the 20 to 25-year agreement, Australian gas will be delivered to
the U.S. west coast for the first time.
McKenzie said: "Securing commitments for 25 percent of Gorgon
production is a very significant step and increases confidence that a
final investment decision on the Gorgon project will be taken in
mid-2006. This deal is worth at least $10 billion and it is the first
supply deal to be finalized for the Gorgon project."
ChevronTexaco, which holds a 50 percent stake as the project operator,
is also holding talks with China's National Offshore Oil Corp. to
export 80 to 100 million tons of LNG over a 25 year period. McKenzie
added that Shell will deliver LNG to the Energia Costa Azul terminal
off northern Mexico, which is currently being constructed by Sempra and
is expected to receive its first gas supplies in 2008. Sempra and Shell
each have 50 percent stake in the terminal's 7.5 million tons annual
capacity rights.
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Atyrau,
Kazakhstan Industry: Oil and Gas (refinery construction)
Company: Gural Gural is an Atyrau-based company established
in 1991 for extraction and marketing of oil. The company is looking for
a U.S. partner to set up a joint venture for the construction of a
small-scale petroleum refinery for the production of gasoline, diesel
(complying with U.S. and European standards), as well as high quality
bitumen. Capacity output for bitumen: 40,000 t/y; capacity output for
oil: 60,000 t/y. The project requires USD 4.5 mln of investments
and the company is interested in finding a partner willing to invest or
having access to financial resources for purchase of technology and
project realization. Gural Ltd. has its own funds and access to local
financial sources. It is willing to participate in project as a
co-investor and partner as well as ensure obtaining required
permissions, licences and other procedures. LeadLink,
http://bisnis.doc.gov/bisnis/lead.cfm?1436
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Shell to ship Gorgon
LNG to Mexico
www.chinaview.cn 2005-04-12 08:16:26 (Source: China Daily, by Angela
Macdonald-Smith) BEIJING
April 12 -- Royal Dutch/Shell Group, Europe's second-biggest oil
company, agreed to export more than US$10 billion of liquefied natural
gas (LNG) from the proposed Gorgon project in Western Australia to a
terminal in Mexico. Shell will export 2.5 million metric tons a year of
gas to the Energia Costa Azul terminal being built in Baja California
for as long as 25 years, the ChevronTexaco Corp-operated Gorgon venture
said yesterday.
Gas deliveries are expected to begin in 2010, it said.
The terminal near Ensenada will be the first to import LNG to North
America's West Coast, enabling producers in the Asia-Pacific region to
boost shipments. Australian LNG ventures have the potential to win
sales contracts in North America worth A$50 billion (US$38.4 billion)
over 20 years, Federal Industry Minister Ian Macfarlane said in January.
"Gorgon gas will form a very important part of the energy mix going
into northern Mexico and the United States," Ian McKenzie, a spokesman
for Shell's Australian unit, said in an interview today at the
Australian Petroleum Production and Exploration Association's
conference in Perth.
The Energia Costa Azul terminal is being developed by San Diego-based
Sempra Energy. BP Plc, Europe's biggest oil company, and partners in
Indonesia's Tangguh liquefied natural gas project will start in 2008 to
deliver as much as 3.7 million metric tons of the fuel over 20 years to
Sempra's Mexican terminal, Indonesia's oil and gas regulator BPMigas
said in October.
ChevronTexaco is working to complete an agreement to ship at least 2
million tons a year of Gorgon gas for 20 years to a terminal it wants
to build in Baja California, said Scott Walker, a spokesman for the
Gorgon venture.
The company has so far received three of the approvals it needs for its
GNL Mar Adentro de Baja California terminal, for which engineering
design work is under way, he said.
ChevronTexaco, Shell and Exxon Mobil Corp last week restructured their
proposed A$11 billion (US$8.5 billion) Gorgon venture, doubling the
amount of gas included in the project to more than 40 trillion cubic
feet by including the Exxon-operated Jansz and Io fields. The venture
signed an initial agreement in 2003 to sell gas to units of Shell and
ChevronTexaco in North America, and has an accord to supply the fuel to
China.
"This is certainly a good foundation contract to move the project
forward," said John Feenan, a Sydney-based Asia Pacific energy
consultant at Wood Mackenzie Consultants Ltd.
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China CB&I Wins
Turnkey LNG Storage Terminal
www.CBI.com Wednesday, April 13, 2005
CB&I has been awarded a lump-sum turnkey contract valued at
approximately US$100 million for the design and construction of storage
tanks at a new liquefied natural gas (LNG) import terminal in Fujian
Province, Peoples Republic of China. The facility will be owned and
operated by CNOOC Fujian LNG Co. Ltd., a co-investment of China
National Offshore Oil Corporation (CNOOC) and Fujian Investment and
Development Corporation.
Located in the city of Xiuyu, Fujian Province, in southeast China, the
LNG regasification terminal has Phase 1 capacity of 2.6 million tonnes
of LNG per year with Phase II expansion under planning. The natural gas
from the terminal will be provided to gas-fired power plants that will
be built during the project's first phase and to household users in
five cities in the province.
CB&I's work scope includes the turnkey engineering, procurement and
construction of two 160,000 cubic meter full containment LNG storage
tanks, including deep foundations, tank topsides, and electrical,
instrumentation, equipment and piping to grade. The project is
scheduled for completion in late 2007.
"We are excited to announce our first LNG project in China," said
Gerald M. Glenn, CB&I's Chairman, President and CEO. "It is
estimated that a large percentage of China's future energy needs will
be met by LNG imports. We are proud to be able to help satisfy this
growing demand with what will be China's second major LNG import
terminal." CB&I is working with a leading Chinese design institute,
Chengda Engineering Corporation, and other strategic local partners on
the project.
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BHP Exxon Dispute
Puts LNG Plan in Doubt
by Stephen Bell FWN Financial News 4/11/2005 URL:
http://www.rigzone.com/news/article.asp?a_id=21709
As other major Australian projects rush to meet growing demand for
liquefied natural gas in China and the U.S., BHP Billiton's (BHP) A$5
billion (US$3.9 billion) Scarborough venture has been hit by a dispute
with joint venture partner ExxonMobil Corp. (XOM). In an escalation of
a disagreement that first emerged last year, ExxonMobil said Monday
that it regards Scarborough's gas as uneconomic, despite high energy
prices and intense marketing efforts by partner BHP on the U.S. West
Coast.
"ExxonMobil believes that Scarborough is unlikely to be commercially
viable in the near term, so we do have a difference of opinion,"
ExxonMobil's Australian chairman Mark Nolan told reporters at the
Australian Petroleum Production & Exploration Association
conference.
In contrast, BHP energy president Phil Aiken said that he expects to
gain approval later this year from U.S. authorities for the company's
proposed Cabrillo port LNG receiving terminal, offshore California. "If
that is successful and we do get Cabrillo port up, then obviously we
have a market for Pilbara LNG," he said, in a reference to Scarborough.
BHP's Pilbara plan includes a major LNG plant at Onslow in Western
Australia that would process Scarborough's gas.
But Nolan said that U.S. approvals for Cabrillo will not change
ExxonMobil's view that Scarborough is uneconomic based on current
reserves.
The operator and 50% owner of Scarborough, ExxonMobil is focusing
instead on the A$11 billion Gorgon LNG development, managed by
ChevronTexaco (CVX).
ExxonMobil also believes that BHP's estimate of eight trillion cubic
feet of gas reserves for Scarborough is "very high", Nolan said.
"We don't agree with their assessment," he said, disputing comments
earlier by Aiken that recent BHP appraisal work has increased the
company's confidence in reserves.
Asked whether the dispute amounted to irreconcilable differences, Nolan
said ExxonMobil believes the Scarborough "marriage" is "worth keeping",
but it "does need a joint venture agreement and decision to proceed".
Nolan also disagreed with Aiken's comment that the results of a major
joint drilling program on the Bass Strait field offshore southern
Australia has been a "disappointment" for the partners.
"We've drilled some wells and found some more gas, but really nothing
of any materiality," Aiken told reporters.
Bass Strait
Field In Serious Decline
But Nolan said that the drilling program is ongoing after starting in
the fourth quarter of 2004. "We've had a couple of less than optimum
wells but I'd also say there is a long way to go yet. So I
wouldn't make any firm conclusions - I'd say that comment (from Aiken)
is premature."
However, he agreed with BHP that Bass Strait's oil production is
declining rapidly. It is likely to drop to around 50,000 barrels of oil
per day in 5-10 years time, compared to current levels of around
120,000 bopd and a peak in the mid-1980s of around 500,000 bopd, he
said.
In contrast to the BHP-ExxonMobil dispute, the proposed Gorgon venture
received a boost when project partner Royal Dutch/Shell (RD) said that
it will take up to 2.5 million metric tons per year of LNG for its
half-owned Energia Costa Azul terminal in Baja California, starting in
2010.
The deal is worth more than US$10 billion over 20 years, Shell said.
"It increases the prospects for Gorgon taking a final investment
decision in mid-2006 as a quarter of the project's proposed gas volumes
are now committed," a Shell spokesman said.
The Gorgon venture, half-owned by operator ChevronTexaco, is proposing
to export 10 million tons per year of LNG to China and North America.
The Gorgon partners - Shell and ExxonMobil each own 25% - are also
trying to finalize a A$30 billion LNG export deal with China.
Elsewhere in Western Australia, Woodside Petroleum Ltd. (WPL.AU) is
continuing talks with potential customers for its 50%-owned offshore
Browse gas field. China and the U.S. West Coast are "obvious" markets
for Browse, although Japan and Korea have also shown a lot of interest
in the project, Woodside chief executive Don Voelte told reporters.
Woodside plans to drill up to three appraisal wells on Browse later
this year to give it greater confidence in the field's gas resources,
currently estimated at more than 20 trillion cubic feet, he said. There
is "scope" for Browse to justify two LNG processing trains of
six-to-seven million tons per year each, that would be built onshore
near Broome. BHP and ChevronTexaco are also partners in Browse along
with Shell and BP Plc. (BP).
Production could start in 2011 or 2012, Voelte said.
He reiterated that Woodside hopes to approve the multibillion dollar
fifth train expansion of the North West Shelf LNG venture by midyear,
although the company is still finalizing contract "rollovers" with
existing Japanese customers. Woodside also wants to move quickly to
develop its recent Pluto gas discovery, possibly as an extension of the
North West Shelf facilities, he said.
Woodside is operator and one-sixth owner of the North West Shelf.
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Chevron Texaco buying
Unocal for $16.4 billion
Oil giant seeks to capitalize on rival's energy supplies in Asia FROM
STAFF AND WIRE REPORTS
SAN RAMON — ChevronTexaco Corp., the nation's second-largest oil
company, is buying Unocal Corp. for $16.4 billion, hoping to accelerate
its already surging profits by boosting its energy supplies in Asia.
The deal announced Monday proposes to unite San Ramon-based
ChevronTexaco, which trails only Exxon Mobil Corp. in the U.S. oil
business, with El Segundo-based Unocal, the nation's ninth-biggest oil
and gas production company.
The ChevronTexaco-Unocal merger could lead to lower gas prices, said
Phil Flynn, energy analyst with Alaron Trading Corp. in Chicago. "The
higher prices are already here," Flynn said. "If we lose Unocal to
China or France, it's going to lead to higher prices for us here and
lower prices there."
Unocal has been considered an attractive takeover target for years,
largely because of its valuable cache of natural gas in Asia and its
oil holdings in the Gulf of Mexico. The company reportedly drew
interest from the China National Offshore Oil Corp., a large
state-owned company, and Italian oil company Eni SpA before settling on
a sale to ChevronTexaco.
If ChevronTexaco did not buy Unocal, a company from another nation
would have, said Flynn. "Oil demand is going to continue to rise
dramatically, and the U.S. is not the only game in town," Flynn said.
"We're competing against the world."
With histories dating back to the late 19th century, the two companies
once competed fiercely in the West Coast gasoline market, but that
rivalry ended nearly a decade ago when Unocal sold its retailing and
refining assets for $2 billion. Unocal's former Rodeo refinery and 76
brand gas stations are now owned by ConocoPhillips — another byproduct
of the consolidation craze that has whittled the U.S. oil industry to a
handful of giants.
ChevronTexaco Chairman David O'Reilly told reporters Monday that he
expects the proposed takeover to receive the required regulatory
approvals so it can be completed before year's end.
But consumer advocate Jamie Court opposes the merger, which he said
could make ChevronTexaco a dominant player in the liquefied natural gas
market. LNG — natural gas that is cooled for shipment
and/or storage as a liquid — is expected to become an increasingly
important source of U.S. natural gas. California currently has no
marine LNG terminals.
"It's a $16 billion bet that California will open the door to coastal
LNG terminals and make the long-term commitment to gas-produced
electricity," said Court, president of the Foundation for Taxpayer and
Consumer Rights in Santa Monica. "I think ChevronTexaco is trying to
corner the market on LNG in anticipation of a LNG-run electricity
system in California."
Court wants the state Legislature or California Attorney General Bill
Lockyer to investigate, noting that ChevronTexaco has donated more than
$220,000 to Gov. Arnold Schwarzenegger's campaign committees, its
former lobbyist is the governor's chief of staff and the firm hosted
some of the governor's top brass on a trip to Australia to pitch LNG as
California's new source of electricity.
The Attorney General's Office is still gathering information to help
decide what level of review to give the proposed merger, spokesman Tom
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Inquiry into
Sempra LNG Project Launched
by Diane Lindquist The San Diego Union-Tribune 4/4/2005 URL:
http://www.rigzone.com/news/article.asp?a_id=21532
As Sempra Energy broke ground on its $800 million liquefied natural gas
receiving terminal in Baja California this week, the state's
legislature launched an official inquiry into the project. The
investigation, which began yesterday, is led by Guillermo Aldrete Hass,
the leader of the legislature's foreign affairs committee. He said he
will ask federal officials to suspend the permits for the project while
the investigation continues and legal challenges remain unresolved.
"There hasn't been transparency from the beginning to the end," Aldrete
said. "We want to know the economic and environmental impacts -- both
negative and positive."
Of particular concern, Aldrete said, are investigative findings and
legal cases in California alleging that Sempra Energy manipulated the
natural gas market during the state's 2000-2001 power crisis, causing
higher prices for consumers. "We can't trust Sempra Energy if they have
these problems in California," Aldrete said.
Federal and legal challenges also have been filed in Mexico to
forestall the LNG project, which is about 14 miles north of Ensenada on
the Costa Azul plateau adjacent to the Bajamar golf resort.
Sempra says the federal cases have been resolved, that a state lawsuit
challenging its title to the Costa Azul property is not valid and that
it conducted a thorough title search before the purchase.
The terminal, which would process liquefied natural gas for Sempra
Energy and Shell, is expected to receive liquefied natural gas
shipments from Indonesia and Russia. The LNG would then be regasified
and shipped by pipeline to Southern California and Baja California.
Aldrete said Baja California uses very little natural gas and that the
project is being built to benefit users north of the border. "We want
an investigation that makes all the issues clear and that the people of
Baja California will be comfortable with," he said.
Sempra spokeswoman Laura Farmer said Aldrete and others who support his
investigation are "clearly misinformed" about the Costa Azul receiving
terminal. "If they were informed about the benefits, they would see we
have complied with stringent federal, state and local laws," she said.
"Baja California has such a huge need for natural gas," Farmer said,
noting that demand for the fuel is expected to double by 2010.
Most would be used to power electricity plants, including one that is
expected to soon be built for the local market near Sempra's LNG
facility. The ground-breaking was held Wednesday, Farmer said, with
about 120 people, including employees, contractors, local supporters
and Shell and BP representatives attending. Media representatives were
not informed, she said, because "we kept the event small so we could
thank the people who are part of it."
Aldrete said he hopes to get the federal congress' support for the
investigation because that body has the power to compel company
officials to testify, while the state legislature can only call state
and local officials.
Referring to allegations that Gov. Eugenio Elorduy Walther has favored
Sempra projects over competing proposals, he said, "It's questionable
why the federal and state governments granted these permits. It's a big
investment, but we're interested in the people of Baja California and
not the relationship between the governor and Sempra Energy." Elorduy
denied any favoritism toward the San Diego company, noting that
ChevronTexaco also has gained permits to build an LNG terminal off the
Coronado Islands.
"It's completely false that I have any prejudice with any company. I
deal with them institutionally, never personally," he said. "We value
as a very important addition to our economy having natural gas brought
into our state to be used by our companies and to be used in
California."
Elorduy, a member of the ruling National Action Party, or PAN, said the
investigation is an "invention" supported only by Aldrete, a member of
the Institutional Revolution Party, or PRI. Aldrete said members of his
foreign affairs committee represent several political parties,
including the PRI and the PAN. He said the issue of the Sempra Energy
investigation will be discussed when Baja California legislators meet
with California legislators in San Diego on Friday
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New oil-gas field
discovered in west S.China Sea
By People's Daily Online March 29 2005
China National Offshore Oil Corporation (CNOOC) announced on Monday
that CNOOC Limited - a subsidiary of CNOOC - had discovered a new
oil-gas field in west South China Sea through independent prospecting.
It could produce crude oil of nearly 1,900 barrels and natural gas of
bout 15,000 cubic meters per day.
The discovery was made in the Weixinan depression in west South China
Sea, which is about 35 kilometers southwest of the Weizhou Island. The
drilling well extends to a depth of 3,476 meters 34 meters under the
water. During two drill-pipe tests the well ran through 11.11mm oil
nozzles. It can produce crude oil of nearly 1,900 barrels and natural
gas of bout 15,000 cubic meters per day.
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